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Thermo Fisher Scientific Inc (NYSE:TMO)
Beneish M-Score
-2.28 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Thermo Fisher Scientific Inc has a M-score of -2.28 suggests that the company is not a manipulator.

TMO' s 10-Year Beneish M-Score Range
Min: -2.88   Max: -1.12
Current: -2.28

-2.88
-1.12

During the past 13 years, the highest Beneish M-Score of Thermo Fisher Scientific Inc was -1.12. The lowest was -2.88. And the median was -2.48.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Thermo Fisher Scientific Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.9871+0.528 * 0.9522+0.404 * 1.2464+0.892 * 1.2902+0.115 * 0.8817
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1011+4.679 * -0.0173-0.327 * 1.0425
=-2.28

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec14) TTM:Last Year (Dec13) TTM:
Accounts Receivable was $2,474 Mil.
Revenue was 4492.8 + 4171.4 + 4321.9 + 3903.5 = $16,890 Mil.
Gross Profit was 2091.9 + 1933.6 + 1846.5 + 1620 = $7,492 Mil.
Total Current Assets was $6,540 Mil.
Total Assets was $42,852 Mil.
Property, Plant and Equipment(Net PPE) was $2,427 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,685 Mil.
Selling, General & Admin. Expense(SGA) was $4,896 Mil.
Total Current Liabilities was $5,350 Mil.
Long-Term Debt was $12,352 Mil.
Net Income was 601.2 + 471.6 + 278.5 + 543.1 = $1,894 Mil.
Non Operating Income was 4.9 + 5.2 + 1.5 + 4.8 = $16 Mil.
Cash Flow from Operations was 953.7 + 676 + 888.7 + 101.2 = $2,620 Mil.
Accounts Receivable was $1,942 Mil.
Revenue was 3466.9 + 3191.8 + 3240.1 + 3191.5 = $13,090 Mil.
Gross Profit was 1481.7 + 1347.9 + 1363.2 + 1336.3 = $5,529 Mil.
Total Current Assets was $9,881 Mil.
Total Assets was $31,863 Mil.
Property, Plant and Equipment(Net PPE) was $1,767 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,000 Mil.
Selling, General & Admin. Expense(SGA) was $3,446 Mil.
Total Current Liabilities was $3,126 Mil.
Long-Term Debt was $9,500 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2473.6 / 16889.6) / (1942.3 / 13090.3)
=0.14645699 / 0.14837704
=0.9871

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(1933.6 / 13090.3) / (2091.9 / 16889.6)
=0.42238146 / 0.44358659
=0.9522

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (6539.8 + 2426.5) / 42852.1) / (1 - (9880.7 + 1767.4) / 31863.4)
=0.79076171 / 0.63443638
=1.2464

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=16889.6 / 13090.3
=1.2902

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(999.9 / (999.9 + 1767.4)) / (1684.8 / (1684.8 + 2426.5))
=0.36132693 / 0.40979739
=0.8817

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(4896.1 / 16889.6) / (3446.3 / 13090.3)
=0.28988845 / 0.26327128
=1.1011

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((12351.6 + 5349.8) / 42852.1) / ((9499.6 + 3126) / 31863.4)
=0.41308127 / 0.39624146
=1.0425

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(1894.4 - 16.4 - 2619.6) / 42852.1
=-0.0173

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Thermo Fisher Scientific Inc has a M-score of -2.28 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Thermo Fisher Scientific Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.99951.72650.4050.94640.990311.09440.94561.02840.9871
GMI 1.01331.09741.05950.97421.00640.97920.98020.97981.00220.9522
AQI 1.19261.2490.99820.95580.99371.01891.02381.00090.83381.2464
SGI 1.19361.442.57051.07710.9631.04561.09351.08231.04641.2902
DEPI 0.66241.89810.43010.97541.03251.04811.01810.95841.00460.8817
SGAI 1.01881.0120.89320.98061.02940.98411.03450.99790.98171.1011
LVGI 1.31740.68750.91340.90881.01291.02271.8861.0061.19181.0425
TATA -0.0201-0.0113-0.0341-0.0208-0.0365-0.0203-0.0146-0.0315-0.0214-0.0173
M-score -2.46-1.12-1.77-2.56-2.70-2.54-2.67-2.62-2.64-2.28

Thermo Fisher Scientific Inc Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
DSRI 0.9190.94870.94861.00571.01861.02841.29661.20091.04670.9871
GMI 0.97530.97730.98530.99851.00051.00221.00320.99620.97220.9522
AQI 0.99451.00090.98820.96390.94720.83381.04871.10261.12471.2464
SGI 1.09911.07871.05961.04841.0441.04641.09161.16491.23141.2902
DEPI 0.89250.95840.9591.00650.99531.00461.19781.07890.96230.8817
SGAI 1.01340.99980.98280.98460.98120.98171.03441.05651.08741.1011
LVGI 1.05041.0061.02761.02580.93571.19181.35511.28611.27171.0425
TATA -0.0342-0.0315-0.0264-0.0222-0.0211-0.0214-0.0058-0.0162-0.0177-0.0173
M-score -2.67-2.62-2.62-2.56-2.52-2.64-2.23-2.28-2.39-2.28
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